A closer look

Harri Kailasalo, Executive Vice President, Infrastructure construction in Finland, the Baltic countries and project exports,

 

We need new approaches

New approaches are sorely needed in order to catch up with the increasing repair backlog of the Finnish traffic network. No compromises can be made with regard to expertise.

The deterioration of the Finnish traffic network is accelerating. We have to invest in its development and maintenance even though the public sector is now under enormous pressure to cut costs.

Before, Finland’s excellent infrastructure used to attract investments. Are we now facing the danger that our neighbours, who are putting a lot of money into the development of their infrastructure, will beat us in the international competition for investments?

Solutions for the sustainability gap, savings and improvement of national competence must be sought in new operating models — and quickly. The worse the traffic network is allowed to become, the more laborious and expensive repairing it will be. By developing design solutions and optimising the quality level, we can achieve significantly more with the same amount of money.

To find such innovative solutions, new kinds of expertise will be required from both us as service providers and our customers.

Innovation curbed by shortage of expertise, not legislation

The success of a construction project often depends on how well the targets of the project are defined. All is well if the customer knows exactly what it wants, orders designs accordingly and decides on changes when and if the need arises. Optimally, the customer and the service provider together search for solutions which best meet the goals set for costs, quality and user satisfaction.

The legislation on public contracts, which some people say curbs public works, provides us with an opportunity to carry out infrastructure projects in an economical and innovative way. However, we cannot have new solutions without new kinds of expertise, both on the client and service provider side. It is nearly impossible for an outsourced consultant to determine the other party’s intention or vision with sufficient clarity if their own expertise is lacking.

New approaches are required

At the moment, construction expertise and resources in Finnish public administration have been run down through efficiency programmes. The situation is particularly difficult in small municipalities and cities, which are seldom in a position to provide professionals with job opportunities that are interesting enough. To exaggerate a bit, the same person working for the technical department should also hoist the flag at a school and master EU-compliant procurement regulations.

For a good example of updated operating models, we can look to Sweden, where project expertise in public administration is strong and resources are sufficient. In Sweden, it has been empirically shown that in projects in which the design work is included in the contract, i.e. the contractor is allowed to innovate, the total costs are reduced by 10–15 per cent on average. Our own findings from the alliance contract for the Rantaväylä tunnel in Tampere are similar. Good planning and co-operation allowed us to come up with savings of almost 20 per cent in the Tampere project.

One solution could be to merge the technical departments of small municipalities into larger organisations. In this way, even smaller locations could provide interesting positions for professionals and, consequently, project expertise in the public sector could be strengthened throughout Finland.

One way of releasing funds for planning and execution is to outsource municipalities’ technical services production to commercial operators. In my opinion, municipal resources are far better spent finding new solutions for infrastructure projects than carrying out road works, for example.

Service providers must rise to the challenge

In Finland, large projects have been carried out successfully and, on the whole, the quality of infrastructure construction is considered good. So, we do have expertise but the problem is that as service providers we are not fully utilising it. When a customer gives us an opportunity to come up with a new approach or versatile solution, we must rise to the challenge.

Instead of talking about how money is scarce, we must offer new insights and operating models. We must strengthen our expertise in order to develop Finland’s infrastructure and the construction industry as a whole.

My ideal project would be one in which the customer sets the budget and explains in broad terms what the basic requirements are. Service providers can together find a solution which results in improved functionality and satisfied end users. I believe this would be profitable for all parties concerned.